Modern technologies have allowed cashless transactions to be conducted using a variety of unconventional devices, such as mobile phones and PDAs. Often times, when a mobile phone, PDA, or other similar device is used to conduct a financial transaction, the user of the device uses a username and password to authorize the transaction associated with a financial account owned by the user. While modern technology has made it convenient to engage in commerce at any time or location using a variety of different consumer devices, the use of untrusted terminals, such as an access device at the point of sale, and untrusted networks, such as the Internet, create new opportunities for fraudulent access to or misuse of sensitive data.
Unauthorized access to sensitive data, such as a username/password combination, may allow for the execution of fraudulent financial transactions. Fraudulent transactions may occur without the knowledge of either party to a legitimate financial transaction. An eavesdropper or “hacker” may be able to use leaked sensitive information to fraudulently authenticate himself to other parties and gain unauthorized access to data, resources, or money. As soon as sensitive data leaves a trusted device, such as a mobile phone or PDA, the data becomes vulnerable to interception and misuse. For example, a point of sale terminal could maintain a log of the usernames and associated passwords that pass through the terminal. This stored information could then be later used in replay attacks to fraudulently create charges on any compromised accounts.
One way to reduce the likelihood of fraudulent use of sensitive data is to re-engineer systems so that sensitive data is not transmitted except in a suitably scrambled form. This is typically accomplished by performing a cryptographic operation on the data, thus changing its form. Encryption requires the creation, distribution, and management of keys. Encryption also requires decryption before protected data can be used. Finally, methods of encrypting data known in the art may require data to be decrypted and re-encrypted multiple times as it passes from system to system or between domains within systems.
It would be desirable to have methods and systems for enabling sensitive data elements to be transformed before the data is transmitted in such a way that this transformation need only occur once, at the time of transaction data collection. It would also be desirable if such methods and systems did not require the computational resources associated with cryptographic computations. It would also be desirable if such methods and systems did not require the creation, distribution, and management of cryptographic keys or other secret information. It would also be desirable if such methods and systems allowed users to authorize transactions against their financial accounts using usernames and passwords without exposing that sensitive data to any third parties.
Embodiments of the invention address these problems and other problems individually and collectively.